January 5th, 2021 | 08:27 CET
BYD, Blackrock Gold, Xpeng - electric cars, where's the limit?
The disruptive replacement of combustion engines with electric motors is in full swing. Pioneers of e-mobility such as Tesla, BYD, NIO and soon Apple, are overrunning the traditional car manufacturers. The latter have either underestimated the development in recent years or do not have the necessary technical know-how. This development can be seen impressively in both the sales increases and the stock market values. The trend seems unbroken, and there is little to suggest a change in the near future.
time to read: 3 minutes | Author: Stefan Feulner
ISIN: CA09258M1014 , CNE100000296 , US98422D1054
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Author
Stefan Feulner
The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
He is passionate about analyzing a wide variety of business models and investigating new trends.
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Incredible valuations
Tesla is by far the most valuable carmaker in the world at USD 670 billion, followed by Toyota at USD 215 billion and the German flagship Volkswagen at a comparably meager USD 100 billion. Add to the Tesla competition Fiat Chrysler, Daimler, General Motors, BMW, Honda and Hyundai. Together, they are on par with the Company led by star founder Elon Musk at just under USD 670 billion.
Of course, this is not reflected in the actual sales or profit figures. Here, Tesla is "still" far behind the competition. Only the fantasy of future profits and absolute market leadership can explain such a high market capitalization.
Record figures on the assembly line
Yesterday, Tesla was once again able to report a record number of deliveries. The US electric carmaker delivered more than 180,000 vehicles to customers in the fourth quarter. That was better than analysts' estimates of 173,000 cars. For the year as a whole, Tesla delivered 499,550 vehicles, just missing its self-imposed target of 500,000 units for 2020.
In the previous year, the figure was 367,500. In addition, the US Company announced that it is on track to build two more production facilities - production at these is scheduled to start before the end of 2021. In addition to the construction of a Gigafactory in Texas's US state, a new Gigafactory is being built near Berlin, which is to produce up to a further 500,000 vehicles per year. Even stronger growth will be sorely needed in the coming years. The same company value as that of the 10 largest carmakers lags enormously.
Strong competition
Chinese competitors NIO and Xpeng also reported record results. NIO managed to top its delivery target for the final quarter. In the last three months of the year, 17,353 cars were delivered - a year-on-year increase of 111%. For the year as a whole, NIO delivered some 43,728 vehicles representing a 112.6% increase over the previous year. Xpeng also reported a sharp rise in delivery figures.
The Chinese manufacturer brought 27,041 cars off the assembly line in the full year 2020, a more than 100% increase on the same period last year. Tesla's biggest competitor, BYD, is also expected to report further record figures. Shares of electric carmakers started the trading day yesterday with double-digit gains but then retreated sharply from the highs. Some air could be taken out of the valuations; this would only be healthy in the long term.
Rise after correction
The gold price has corrected in recent months. After its high in August at over USD 2,000, a consolidation of several months below USD 1,800 followed. By dynamically breaking above the USD 1,900 mark, the precious yellow metal is now aiming for the old highs. Gold mining stocks have also corrected well recently and are becoming attractive again for investors. One interesting Company is the gold explorer Blackrock Gold, which is working on two very promising projects in Nevada's US state.
The first project, Tonopah West, saw positive news at the end of last year. Due to positive results, the Victor gold ore vein had to be enlarged by 480m. In addition, the gold and silver discoveries were significantly above expectations. Thus, in the full year 2020, a total of 14 gold and silver discoveries were achieved with peak four-digit results in grams per ton. Further drill results are still pending for 2021. Should these also turn out positive, the path to becoming a precious metals producer is not far away.
Hot iron in the fire
Blackrock Gold's second property is also performing similarly well. At Silver Cloud, the Canadians were able to announce the start of a 3,500-meter drill program. The area is attractive because the geology shows many similarities with the Hollister mine operated by Hecla Mining. Here, the Company is currently evaluating whether Silver Cloud could be the extension of the Hollister mine.
Management is also planning to transfer the project to a new company as a spin-off. Doing this would once again bring significant fantasy into the share price. Currently, Blackrock Gold is trading at around CAD 1.00. The high was CAD 1.62 in August 2020.
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